Costco Wholesale Operating Margin %

Operating Margin % is calculated as Operating Income divided by its Revenue. Costco Wholesale's Operating Income for the
three
months ended in Feb. 2020 was $1,266 Mil. Costco Wholesale's Revenue for the
three
months ended in Feb. 2020 was $39,072 Mil. Therefore, Costco Wholesale's Operating Margin % for the quarter that ended in Feb. 2020 was 3.24%.

Good Sign:

Costco Wholesale Corp operating margin is expanding. Margin expansion is usually a good sign.

Costco Wholesale's Operating Income for the
three
months ended in Feb. 2020 was $1,266 Mil.
Its Operating Income for the trailing twelve months (TTM) ended in Feb. 2020 was $4,912 Mil.

Costco Wholesale Operating Margin % Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Costco Wholesale Annual Data

Aug10

Aug11

Aug12

Aug13

Aug14

Aug15

Aug16

Aug17

Aug18

Aug19

Operating Margin %

3.12

3.09

3.19

3.16

3.10

Costco Wholesale Quarterly Data

Aug15

Nov15

Feb16

May16

Aug16

Nov16

Feb17

May17

Aug17

Nov17

Feb18

May18

Aug18

Nov18

Feb19

May19

Aug19

Nov19

Feb20

May20

Operating Margin %

3.23

3.08

2.86

3.24

3.16

Competitive Comparison

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.

Costco Wholesale Operating Margin % Calculation

Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.

Costco Wholesale's Operating Margin % for the fiscal year that ended in Aug. 2019 is calculated as

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Costco Wholesale (NAS:COST) Operating Margin % Explanation

Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.

Be Aware

Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.

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